tag:blogger.com,1999:blog-32202893.post7730412630647708898..comments2023-10-18T08:32:17.510-07:00Comments on Kevin Hillstrom: MineThatData: Brand Loyalty in the Automobile IndustryUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-32202893.post-60513214770520302312006-12-16T13:16:00.000-08:002006-12-16T13:16:00.000-08:00Thanks, Charles, for the response. I've always be...Thanks, Charles, for the response. I've always been an advocate of customer acquisition. But on big ticket items with long purchase cycles, the math really plays out, doesn't it?MineThatDatahttps://www.blogger.com/profile/14014200122021988374noreply@blogger.comtag:blogger.com,1999:blog-32202893.post-92176365498019980972006-12-15T12:25:00.000-08:002006-12-15T12:25:00.000-08:00Kevin/Jim, that's an excellent tutorial in the pow...Kevin/Jim, that's an excellent tutorial in the power of retention economics. As far as I'm concerned, the magnitude of the implications of retention economics make it the number one strategic approach--more powerful than the reigning paradigm made popular by Michael Porter and wielded most recently (and famously) by Jack Welch (be number one or number two in your segment, be the low cost producer). <br /><br />The Toyota example is one of the few that get it really right. In a lot of cases, the "experts" confuse simple repeat buying behavior--customer retention--with loyalty. The result--a number of "loyalty" programs based on such things as special deals or promotions or price cutting.<br /><br />The way to huge profits is through customer trust, which results in loyalty, which goes way beyond repeat purchases due to promotional strategies. Toyota buyers aren't loyal because of a deal, but because of a total package of product, service, features, quality, etc.<br /><br />Yet there's one level even beyond that, and that is trust. One can make a rational decision to buy a car besides a Toyota. But if one comes to trust a company, a dealer and a salesperson, for example, then the loyalty ratio goes way up. Buyers will make decisions faster, not take as much time doing analyses, will take recommendations more easily.<br /><br />This isn't trivial. In its own way, it is as hard--sometimes harder--to create trust than it is to build a quality package of "automobile." But it's even more powerful.<br /><br />Thanks again for the great example of the power of motivated retained customers.Anonymousnoreply@blogger.com